Canada: Proxy Season 2018: ISS And Glass Lewis Issue Guidelines

Institutional Shareholder Services (ISS) and Glass Lewis (GL) have both updated their proxy voting guidelines for the 2018 proxy season. Key changes to the guidelines relate to director overboarding and gender diversity. The guidelines are generally stated to be applicable to meetings held in 2018, but the implementation of some changes (as set out below) is delayed until the 2019 proxy season.

Director Overboarding

Current Guideline(s)

Changes to or Clarification of Guideline(s)

  • ISS guideline applicable to TSX-listed companies only
  • whether or not a company has a majority voting policy, ISS recommends voting against directors who are "overboarded"
  • ISS definition of overboarded is two tier:
    • CEO director who sits on more than one outside public company board or non-CEO director who sits on more than four public company boards; and
    • director has attended less than 75% of his or her respective board and key committee meetings in last year without valid reason (the attendance trigger)
  • ISS withhold recommendation will only apply to CEO director with respect to outside boards
  • GL defines an overboarded director as a director:
    • who is an executive officer who sits on more than two public company boards; or
    • is a non-executive board member who sits on more than five public company boards
  • GL generally permits TSX-V directors to sit on up to nine boards. Where directors are on both TSX and TSX-V boards, GL will consider on a case-by-case basis
  • ISS current guideline will apply in the 2018 proxy season. New guideline will be applicable to TSX-listed companies for meetings held on or after February 1, 2019
  • ISS will continue to recommend voting against "overboarded" directors in new guideline
  • ISS will amend the definition of overboarded for meetings held on or after February 1, 2019, to mean:
    • a CEO director who sits on more than two outside public company boards; and
    • a non-CEO director who serves on more than five public company boards
  • attendance trigger will be removed for proxy season 2019, which will harmonize Canadian and US standards
  • ISS withhold recommendation will only apply to CEO director with respect to outside boards. Although subsidiary boards (>50% ownership) will be counted as separate boards, they will not be considered outside boards to which the withhold recommendation applies
  • GL has not changed its director overboarding policy but has clarified that when determining whether non-CEO executive
  • directors are overboarded, GL will look at specific duties and responsibilities of executive in determining if an exemption is warranted

Board Gender Diversity

Current Guideline(s)

Changes to or Clarification of Guideline(s)

  • neither ISS nor GL currently has formal gender diversity guidelines
  • since 2015, the Canadian Securities Administrators have required disclosure by TSX-listed issuers as to whether they have adopted a written policy relating to the nomination of women directors and executive officers and, if so, how the board or its nominating committee measures the effectiveness of such policy and, if not, why not
  • ISS is introducing a gender diversity guideline applicable to S&P/TSX Composite Index companies in the 2018 proxy season
  • ISS gender diversity guideline will be applicable to all TSX-listed companies in the 2019 proxy season
  • ISS recommends withholding voting for the chair of the nominating committee (or, if no nominating committee, the chair of the committee with the closest responsibility to the nominating committee or, if no nominating committee or other committee identified, the board chairman) if company has:
    • no female directors; and
    • no robust gender diversity policy in place (which should include measurable goals/targets)
  • exemption from ISS gender diversity guideline for:
    • newly publicly listed companies within the current or prior fiscal year;
    • companies who have graduated from the TSX-V, within the current or prior fiscal year; and
    • issuers with four or fewer directors
  • GL has not adopted a voting recommendation regarding gender diversity for the 2018 proxy season but has added a discussion as to its considerations on gender diversity
  • GL will continue to review the composition of boards and note concern where a board lacks representation of diverse candidates
  • GL will introduce a gender diversity voting recommendation for the 2019 proxy season that will generally recommend voting against the chair of the nominating committee if company has:
    • no female directors; or
    • no formal written diversity policy in place
  • GL may refrain from making a recommendation for companies outside the S&P/TSX Composite Index, or if company has provided sufficient rationale for not having any female directors
  • both ISS and GL have publicly acknowledged concerns regarding boilerplate gender diversity disclosure and are looking for an issuer's clear commitment to increase gender diversity on its board, which should include goals/targets


Virtual Shareholder Meetings

Current Guideline(s)

Changes to or Clarification of Guideline(s)

  • no current guidelines in Canada regarding meetings held by virtual means only as in other jurisdictions
  • both ISS and GL have publicly supported hybrid meetings (expanding participation in "in-person" meetings electronically to persons who cannot attend in person)
  • concern regarding virtual-only meetings that such meetings may restrict ability of shareholders to participate
  • no ISS or GL recommendation for 2018 season but GL will be looking for robust disclosure as to how the issue of shareholder participation will be addressed
  • in 2019, GL will generally recommend voting against members of the governance committee where the board is intending to hold a virtual-only meeting and does not provide robust disclosure in the circular that assures shareholders they will be afforded the same rights at a virtual meeting as they would have at an in-person meeting

Board Responsiveness

Current Guideline(s)

Changes to or Clarification of Guideline(s)

  • ISS will generally recommend withholding votes for continuing directors where the board failed to act on shareholder proposal that received majority shareholder support at the previous shareholder meeting
  • GL may recommend voting against compensation committee members if the committee fails to address shareholder concerns on failed say-on-pay proposals
  • current GL guideline that when 25% or more of shareholders withhold votes from a director nominee, vote against a management proposal or vote for a shareholder proposal, the board should respond to such concerns
  • GL has amended its guideline to provide that a board of directors has an imperative to respond where 20% or more shareholders withhold votes from a nominee director, vote against a management proposal or for a shareholder proposal. GL further notes that in dual-share structure companies, it will examine the level of support of non-affiliated shareholders

Other Changes/Guidance

Current Guideline(s)

Changes to or Clarification of Guideline(s)

  • Pay for Performance
    • ISS guideline applicable to TSX issuers where there is significant long-term misalignment between CEO pay and company performance
    • GL pay-for-performance model in place
    • Advance Notice Guidelines

      • advance notice guidelines in place for both ISS and GL for TSX group companies
  • Pay for Performance
    • ISS guideline for pay for performance still in place but ISS has updated its quantitative screen methodology to incorporate a three-year Relative Financial Performance Assessment that measures the alignment of pay and financial performance in peer group
    • no amendments to GL methodology re. pay-for-performance model but GL has clarified grading system by stating that a C grade means a company's pay and performance percentage rankings to peers is generally aligned
    • Advance Notice Guidelines

      • no substantive changes to advance notice guidelines but ISS has made amendments to bring guideline in line with 2017 TSX notice that requiring nominating shareholder presence at the meeting where nominee is proposed for the nomination to be accepted would not be consistent with TSX director election requirements

Depending on their institutional shareholder base, issuers will also want to consider any voting recommendations issued by such institutional shareholders that may, in some instances, exceed the ISS and GL guidelines. Copies of the ISS 2018 Benchmark Proxy Guidelines can be accessed here and the GL Proxy Paper Guideline Recommendations can be accessed here.

About Norton Rose Fulbright Canada LLP

Norton Rose Fulbright is a global law firm. We provide the world's preeminent corporations and financial institutions with a full business law service. We have 3800 lawyers and other legal staff based in more than 50 cities across Europe, the United States, Canada, Latin America, Asia, Australia, Africa, the Middle East and Central Asia.

Recognized for our industry focus, we are strong across all the key industry sectors: financial institutions; energy; infrastructure, mining and commodities; transport; technology and innovation; and life sciences and healthcare.

Wherever we are, we operate in accordance with our global business principles of quality, unity and integrity. We aim to provide the highest possible standard of legal service in each of our offices and to maintain that level of quality at every point of contact.

For more information about Norton Rose Fulbright, see

Law around the world

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Stewart McKelvey
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Stewart McKelvey
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions